Theresa May is planning to drop the proposal commissioned by her predecessor David Cameron

“While the government found the analysis of Lord Strathclyde compelling and we are determined that the principle of the supremacy of the elected house should be upheld, we have no plans for now to introduce primary legislation,” said David Lidington, the minister who manages government business in parliament.

The plans had been described by a parliamentary committee as a “disproportionate response” to the defeat of Mr Osborne’s plans to cut £12 billion of tax credits last October.

Labour peer Baroness Smith said the plan was an “absurd overreaction”, and a House of Commons committee had described peers’ decision as “the Lords legitimately exercising a power that has only been exercised on five occasions and which even Lord Strathclyde himself has admitted is rarely used”.

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Without appropriate safeguards, the reforms would risk “substantially” diminishing the Upper House’s influence and role in scrutinising statutory instruments, encouraging the Government to make further use of them, it said.

But the move is a “big mistake” and risks peers blocking Brexit because the Tories do not have a majority in the Lords, according to Lord Digby Jones.

The plans were drawn up after George Osborne’s plan for tax credit cuts were blocked in the upper chamber

The crossbench peer suggested the PM has miscalculated if she thinks treating the Lords well now will win peers’ support on crunch votes in the future.

He told the BBC Radio 4 Today programme: “I would have stuck to my guns because I think they’re going to live to regret it on all of the Brexit stuff coming down the pipe.

“When you’ve got eight Liberal (Democrats) in the Commons and you’ve got 100 Liberal (Democrats) in the Lords and they want actually to stay in the EU and they’ll do anything to stay in the EU, I think they’ll rue the day.”

He added: “I think it’s, in political, legislative management terms, a big mistake because this stuff is going to be huge coming down the pipe in a year’s time.”